UK inflation surges to 3%

Increases in food and fuel costs led the cost of living rate to surge from the 2.5% recorded in March, to well above the 2.6% forecast for last month. The 3% figure is now much further away from the Bank of England’s 2% inflation target and is just 0.1% below the level Governor Mervyn King would have to write an explanation letter to the Chancellor. Royal London Asset Management economist Ian Kernohan says the Monetary Policy Committee's task has become much harder. “The MPC needs to explain why it is cutting rates when inflation is rising; a difficult but not impossible task,” he says. ...